A leader is a person whom others follow -- whether on a team, at work, in school or in any situation where there are goals are to achieve. A leader directs the group and inspires the others to work together for a common purpose. Leaders can broadly be classified into two kinds: formal leaders and informal leaders.

Formal Leadership

Formal leadership is where a person is officially designated as the leader of a group. Examples of this kind of leadership are CEO of a company, a teacher at a school, the captain of a sporting team and the head of a department. It's the formal leader’s job to organize the available resources, work out the logistics and motivate the members of the team to carry out their tasks to the best of their abilities.

Informal Leadership

An informal leader is a person who's not officially appointed as the head of a group. However, the other members look to him for motivation and inspiration. Though the CEO is the formal leader of a company, the employees may look up to a colleague who, they believe, shares their goals and visions and has some knowledge or experience that will help them realize their goals. Although these leaders are not in a formal position of leadership, they are recognized as leaders by their peers.

The Differences

Formal leaders have authority and certain rights and privileges that informal leaders lack. Consider the case of a company where the CEO is the formal leader and an employee is the informal leader. The formal leader wields power over the group and has the authority to discipline and punish errant members. Her authority also gives her the ability to give rewards to the group. The informal leader, on the other hand, does can't formally take action against any members of the group, nor is he able to reward his teammates. He has to rely on open communication, a shared vision, guidance and charisma. The informal leader has to lead through example, individual behavior and personality.

Conflict and Cooperation

A group with both formal and informal leaders is likely to see conflicts between the two if they don't share the same vision. The group has different loyalties to the two leaders. Group members are expected to be loyal to the formal leader because he has authority and power, and they're likely to be loyal to the informal leader because he's one of them. The informal leader has a greater commitment to the group, while the formal leader’s commitment lies with the organization. In any situation, it's important for the formal and informal leaders to work together to make sure that the group achieves optimum results.